ECFA will intensify left-right spat in Taiwan
Central News Agency | 2010-01-19
ECFA will intensify left-right spat in Taiwan
Taipei, Jan. 18 (CNA) — The proposed trade pact between Taiwan and China will only benefit certain people and corporates and intensify a left-right economic spectrum, a scholar told the Central News Agency in an interview.
The pact, known as Economic Cooperation Framework Agreement (ECFA) , "is not an independence-unification issue but a left-right economic social issue with a core concern of wealth re-distribution, " said Lo Chih-cheng, a political scientist at Soochow University.
"A predicted gross domestic product (GDP) growth after the agreement takes effect may be impressive and appealing on the surface. However, do all those numbers and indexes announced by the government reflect people’s concerns?" Lo asked.
The ECFA, which Taiwan government intends to sign with China to relax trade and financial regulations in the first half of 2010, is expected to increase Taiwan’s GDP by 1.72 percent, Bureau of Foreign Trade Director-General Huang Chih-peng said in October, 2009.
Lo said that the ECFA, in essence a free trade agreement, will only benefit certain sectors and large corporates while damaging the small and medium-sized businesses (SMEs) , the backbone of Taiwan’s economy, and the working class.
"Let’s say a large corporate secures a NT$10 billion profit and the SMEs lose NT$90 millions because of the cross-Taiwan Strait agreement. On paper, Taiwan economy grows, but those NT$90 millions are ’survival money’ for those SMEs and thousands of families behind them, " he said.
The controversial agreement reflects a fact and a concern that, while large corporates are capable of lobbying and influencing the government policies, SMEs and ordinary people are left out in the cold when "the rich gets richer and the poor get poorer", Lo said.
And that’s why Lo thinks it’s a left-right issue rather than a ruling Kuomintang (KMT) vs. the opposition Democratic Progressive Party (DPP) issue or an independence-unification issue.
"It’s all about choice-making. A government is obliged to pursue the interests for the majority of people, " he added.
Lo saw some contradictory facts and mistakes in Taiwan’s negotiations process. While the Taiwan government pointed out that the agreement is more of a framework with actual contents waiting to be made in the future and the DPP opposed for the sake of opposition, he said, it announced concrete GDP growth prediction at the same time.
And Taiwan has said on several occasions that it is eager to complete the deal in the first half of 2010, which is against the basic rule of negotiations, he said.
"When you set a timetable before the negotiations, you tie your own hands at the back and put yourself in a disadvantage, " he said.
He said that Taiwan government also needs to thoroughly explain different negotiations scenarios to the public and let people know what sacrifice they might have to make in order to secure the benefits.
The government said Taiwan is in danger of being marginalized and hollowed out after the ASEAN-China (Association of South East Asian Nations-China) free trade arrangement went into effect because Taiwan-made product will be imposed with higher tariffs in the integrated region.
Lo denounced the argument, saying that Taiwan’s biggest trade competitor is South Korea, not ASEAN countries and the government "intentionally magnify the impact of the ASEAN-China free trade agreement." On the contrary, not only Taiwan-made products will not enjoy easier access to the ASEAN but more local businesses will relocate to China, he said.
An ECFA can neither solve Taiwan’s unemployment and capital outflow nor attract Taiwanese businessmen to re-invest in Taiwan, he said, unless Taiwan is equipped with fine-tuned policy on labor, industrial parks, environment protection and tax incentives.
It is wrong to place the agreement with China as the priority of Taiwan’s national development strategy. Taiwan needs to have an alternative plan, which means industry upgrade and establish pioneering sectors, Lo said.
"There’s not one country I know of that formulates its national policy on outbound investment. What Taiwan needs to do is to attract foreign directive investment and create jobs, " Lo said.
It’s the government’s responsibility to identify what those sectors are and play a major role in fostering their development, he said.
"Businessmen will always go for profit and short-term goals, and there’s nothing wrong with that. But a government has to look at this in a long-term perspective, " Lo said.
There’s always a possibility that China is engaged in the negotiations for more than economic benefits, Lo noted, saying that China will still eye on an eventual goal of political gain.
(By Chris Wang)
